Myth: The value that is assessed by the appraiser should be exactly the same as the market value.
Reality: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always.
Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: The buyer or the seller may have leverage in the value of the house depending upon for whom the appraiser is working.
Reality: The appraiser has no vested interest in the outcome of the appraisal and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement cost of the property should be on par with the market value.
Reality: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a particular property, with neither being under duress to buy or sell.
The dollar amount needed to reconstruct a property is what forms the replacement cost.
Myth: Specific formulae, such as the price per square foot, are the methods appraisers use to arrive at the value of a home.
Reality: An appraisal report is a collection of data based on the home's size, location, proximity to undesirable facilities, the condition of the home and the values of recent comparable sales. You can count on S&N Appraisal, Inc's staff to be honest in assessing this information.
Myth: In a powerful economy - when the prices of properties in a given area are reported to be increasing by a particular percentage - the values of individual homes in the area can be expected to appreciate by that same percentage.
Reality: All increase of value is on a case-by-case basis, determined by data on relevant elements and the data of comparable homes.
It doesn't matter if the economy is doing well or declining.
Myth: The house's exterior is determinate of the expected price of the home; there is no need to do an interior appraisal.
Reality: Property value is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends.
Obviously, none of these variables can be found just by examining the home from the exterior.
Myth: Since you're the one paying for the appraisal report when applying for your loan to purchase or refinance your home, you own the ordered appraisal report.
Reality: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal.
By the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be provided with it by their lending agency.
Myth: There's no reason for home buyers to even concern themselves with what the appraisal contains so long as their lending institution is satisfied.
Reality: Only when home buyers check out a copy of their appraisal can they double-check its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the report makes a valuable record for future reference, containing useful and often-revealing data - including, but not limited to, the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending agency.
Reality: Depending upon their qualifications and designations, appraisers can and often do provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: Appraisal reports have almost nothing in common with a home inspection report.
The task of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report.
The job of a home inspector is to determine the condition of the house and its major components, then compose a report on these conclusions.
